Over the next month I will offer a peak into the highly competitive world of proprietary trading to give readers a taste of the daily work of a professional trader. I will share 30 trading habits in 30 days. My hope is that this will give you some ideas on habits to add to your trading.
Before we begin let me clear up a few points. What is a proprietary trading firm? At our firm, we back all traders with firm capital. It is not uncommon for a high performing trader to be provided with a trading account of over 10 million in buying power. We split trading profits with the profitable traders and take 100 percent of the losses from losing traders. Also, we provide proprietary technology for our traders that is not available outside the firm. Further, we provide automated trading technology for traders to back-test, forward-test and trade live from their desktop.
Given this, our only path to making money as a firm is developing profitable traders.
The PnL of our traders is largely a computation of the habits they develop and NOT their trading calls on market or individual stock direction.
Thus we encourage best practices that are then turned into habits so our traders and our firm succeed. I hope this context helps communicate the importance of these trading habits to successful trading.
If at anytime you have questions about these trading habits, please visit Ask Anything and submit a question.
Let me being with Trading Habit #1- The PlayBook.
Each day after the close new traders are required to archive a setup that makes the most sense to them from the previous trading session. They archive the setup with specific variables: The Big Picture, News Catalyst, Technicals, Reading the Tape, Trade Management,
And then 2xs a week we meet in our training room, as you can see in the picture above, to review one PlayBook trade from a developing trader. I critique their trade. I press the trader on specific elements of the trade. Why didn’t you get bigger there? Why did this trade work? If you made this trade 1000 times would you have edge? Other traders ask questions as well.
Recently we have reviewed trades in $SPY $ACI $AAPL $GPRO.
This is a process for traders to build their trading business.
Do you have a formal system for archiving your best setups? If not consider adopting this best practice into habit.